London Heathrow is the largest airport in Europe, with more than 76 million passengers and 1.54 million tonnes of cargo passing through in 2016. Eighty-one airlines operate through the airport, serving 194 destinations in 82 countries. In 2016, Heathrow recorded 473,231 air transport movements, equivalent to almost 1,300 air transport movements each day. As a critical element of the UK’s infrastructure, the highest standards of security, risk management and efficiency are required across the organisation.
Treasury plays a key role in delivering these objectives, such as managing bank risk, and ensuring that financial processes, controls and transactions take place within a robust and secure infrastructure. This was the background to Heathrow’s recent project to replace its primary clearing bank and implement a new bank connectivity framework based on SWIFT Alliance Lite2.
Heathrow has a centralised treasury function based at the airport, covering both front office (risk monitoring and hedging, cash and liquidity management, debt capital markets, transaction execution and bank relationship management) and back office (accounting and valuation, hedge accounting). In addition, a Business Service Centre (BSC) based in Glasgow supports transaction settlement and confirmation matching, account reconciliation and centralised processing of all operating payments, including payroll. Both treasury and BSC were included within the scope of the new connectivity project.
Vandana Vajir, Head of Treasury Systems at Heathrow, introduces the background to the project,